Luxembourg Freeport Customs aspects Marc Valette Managing - - PowerPoint PPT Presentation

Luxembourg Freeport

Marc Valette Managing Director, Centre Logistique de Bettembourg (CLB) and Lentz multimodal (LMM) 18 September 2014

Customs aspects

Introduction CFL Group and the Luxembourg Freeport CFL Fret strategy & Luxembourg Freeport objectives Process flows and customs impacts into the Luxembourg Freeport Advantages of Luxembourg Freeport on Customs and VAT perspectives

• In comparison with other regimes
• General overview
• A concrete example

Conclusion Team resumes

Contents

2 Luxembourg Freeport - Customs aspects

→ Safe and stable local and political environment

Success factors for Freeport users : 3 pillars

Appropriate & secure storage solution and efficient logistical services Optimized transport facilities for products & people Reliable & accurate treatment of Customs tax and legal issues Operation services & value creation Financial & risk management

Different expectations → Main challenges linked to customs aspects in the Luxembourg Freeport

Introduction

3 Luxembourg Freeport - Customs aspects 3

Values and project of CFL Fret

• High-performing logistics and transport actor
• Added-value logistics service
• Serving

− National and Regional Economy − Sustainable development

• Interest in Luxembourg Freeport operations as an

committed actor in Luxembourg innovation & continuous improvement in logistics

• Highly proficient on customs operations enabling to

respond to operators customs and tax issues Selected and retained for providing Luxembourg Freeport on-site customs services Conventional Rail Freight Multimodal freight Logistics services incl. Customs Agency Services

Groupe Fret

CFL Group and the Luxembourg Freeport

CFL group (2013):

• National railways in Luxembourg
• 4th industrial group in

Luxembourg

• 4 050 employees
• 684 Mio € turnover

CFL Multimodal (2013):

• Integrated supply chain solutions
• 1st multimodal operator in Luxembourg
• 355 employees
• 48 Mio € turnover

4 Luxembourg Freeport - Customs aspects

• Development of rail transport to lead Luxembourg to the heart of future rail motorways network
• Development of special transport and logistics scheme integrating rail, fiscal representation, bounded warehouse and VAT

advantages to promote Luxembourg place

• Huge logistical projects in coming years

New rail terminal in Bettembourg New centralized warehouse

→ Luxembourg Freeport, CFL projects & VAT environment are key to promote Luxembourg global attractiveness

• n supply chain operations

Operational in 2016

CFL Fret strategy & Luxembourg Freeport objectives

5 Luxembourg Freeport - Customs aspects 5

Luxembourg Freeport stakeholders participating to customs process

Customs autorities

• Deliver (or cancel !) agreement to the logistic operators active in the

Freeport,

• Monitor the customs functionning of the Freeport

Authorized

• perator
• Notifications to customs
• Goods accounting
• Record of services provided

Customs agent

• Customs declaration including transit, temporary admission,…
• Edition of VAT for non professional owner (exit process)
• Collection of information regarding cycle life operations for declaration

Luxembourg Freeport - Customs aspects 6

Temporary output without sales Internal sales without exit

• f the goods

Storage, restoration, exhibition, …

Freeport life

Product location Product

• wnership

Transport to Freeport Inbound process

• Evaluation of entrance situation

‒ Nature of underlying transaction (transfer, sale) ‒ Customs status of the valuables ‒ VAT status of owner ‒ Origin of products

• Creation of declaration if

necessary

• Valuation & Insurance evaluation

Outbound process

• Evaluation of exit situation
• Estimation of exit value
• Customs declaration if

necessary

• Validation by customs

Transport out of Freeport Temporary Outbound process

• Organization of export

model

• Organization warranties

(transit, carnet ATA,…)

• Declaration if necessary
• Evaluation of exit value for

customs perspective Value evolution Transport and return out

• f/into Freeport

Sales executed under temporary output For investors, reliability on inbound customs & tax processes are key to avoid “BAD SURPRISES” at the end

Process flows and customs impacts into the Luxembourg Freeport

7 Luxembourg Freeport - Customs aspects

More flexibility for users especially in:

• Facilitating the communication with authorities (notification oriented vs. declaration oriented)
• Combining different special regime for VAT and customs on one place (operator agreement
• vs. customs authorization)

Type 1 customs Free Zone Article 166 to 181 of European Regulation No 2913/92 and articles 799 to 813 of the European Regulation No 2454/93 VAT suspended regime Article 60 bis of the Luxembourg VAT law, implementing the articles 154 to 163 of the Directive 2006/112/EC

Simplicity for investors

Advantages of Luxembourg Freeport on customs & VAT perspectives In comparison with other regimes

8 Luxembourg Freeport - Customs aspects

ADA ADA : customs authorities AED : authorities in charge of VAT

Advantages of Luxembourg Freeport on customs & VAT perspectives General overview

9 Luxembourg Freeport - Customs aspects

Advantages of Luxembourg Freeport on customs & VAT perspectives A concrete example

10 Luxembourg Freeport - Customs aspects

Purchasing value : 1 Mio € Transport and safety : 1% Entrance process Transport to Luxembourg Freeport via Luxembourg Airport Cycle life

• Exhibition
• Storage in Free port
• Special Insurance

Hypothesis : 10 % of the entry value Exit process Transport to China via Luxembourg airport Hypothesis : 200 % of the entry value

Evaluation of situation related to entrance : Collection

• f information on client and product situation
• Entrance notification to customs by authorized
• perator
• No customs declaration, no duties to pay
• No VAT declaration, VAT suspended regime

The authorized operator shall

• Keep records of operations and costs
• Notify the sale to customs

Evaluation of situation related to exhibition and sale

• No VAT declaration, VAT suspended regime

Evaluation of situation related to exit : Collection of information on client, product and cycle life events Determination of current value of product Analyse of export condition for paper documentation

• Exit notification to customs
• Declaration to customs
• VAT declaration, exempt transactions

EACH SITUATION IS DIFFERENT For customs agent,

• reliability of

information is crucial

• to declare correctly

and appropriately

• Sale to Chinese gallery

Hypothesis : 150% of the entry value

Italian gallery purchasing a art picture from Switzerland and selling to Chinese client with a doubling of price in three years

• Huge advantages to simplify processes and reduce risks for owners, requiring:

‒ Smart and deep analysis at inbound stage ‒ Transparency on product life cycle within the Freeport ‒ Good assessment of exit constraints

• Reduce administrative burden linked to indirect taxation
• Appropriate place for safe management of valuables

Conclusion Luxembourg Freeport from customs perspectives

11 Luxembourg Freeport - Customs aspects 11

Marc Valette Managing Director Luxembourg

Centre Logistique de Bettembourg (CLB) and Lentz multimodal (LMM)

Gilbert FRASELLE Responsable Agence Douane Luxembourg

Lentz Multimodal

Karine Bellony Partenaire douane Luxembourg

Lentz Multimodal (LMM)

Team resumes CFL Multimodal – Customs agency services

12 Luxembourg Freeport - Customs aspects

CFL multimodal thanks you for your attention

13 Luxembourg Freeport - Customs aspects

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